(Corrects literal in headline)
* New rules don't shut out Swiss-based managers
* Removal of uncertainty could trigger delayed exodus
By Martin de Sa'Pinto
ZURICH, Nov 11 (Reuters) -New European Union rules on hedge
funds and private equity will not shut out Swiss-based companies
as previously feared and could lead to more hedge funds moving
to tax-friendly Switzerland, industry insiders said.
The regulation, which the European Parliament passed on
Thursday, could kick start Swiss efforts to lure financial
professionals away from Britain, currently home to 75 percent of
European hedge fund assets, with the promise of lower taxes.
"This will certainly have an impact on the larger fund
managers with big risk and portfolio management departments,"
said Marcel Jouault, who represents the financial industry in
Pfaeffikon, a town near Zurich.
Earlier this year, industry professionals and consultants
said uncertainty over the pending regulation was a major factor
causing London's wealthy hedge fund managers to stay put despite
stiff tax increases for top British earners. [ID:nLDE64R0KT]
The new ruling removes that uncertainty and allows
EU-established funds to delegate portfolio and risk management
to Swiss-based managers under the supervision of FINMA, the
regulator, said the Swiss Funds Association in a statement.
The EU regulation package had already been agreed in
October with EU states, which have joint say with parliament on
the rules. [ID:nLDE6AA15E]
Swiss asset managers will have to comply with regulations
comparable to those for other EU managers. Switzerland also has
to conclude double taxation treaties which meet international
standards, the SFA said.
"Swiss asset managers may at a later date acquire
authorization in respect of marketing in one or more EU member
states, or even an EU Passport," the body added.
A European Union passport allows funds which qualify for a
license to be sold in one EU country to operate across the
"The passport was an issue, but with clearer guidelines,
we'll see a lot more happening now. More large funds will move
over and more firms are establishing branches in Switzerland now
the uncertainty has passed," said Jouault.
Pfaeffikon, near Zurich, is in the low-tax Schwyz canton
which is planning to further reduce taxes in 2011 in its drive
to attract funds.
Jouault said many European managers had been gearing up for
a possible move to his region of Switzerland even before the new
rules were agreed.
"Since August it's like somebody turned on a switch. There
have been a lot of real enquiries, real people coming to take a
look, checking out apartments ... We have registered 50 new
financial companies in Pfaeffikon this year," he said.
(Editing by Jon Loades-Carter)